Marking a major milestone in home entertainment’s shift to digital formats, video streaming subscription revenues surpassed DVD / Blu-ray sales in the United States for the first time in 2016. This trend continued through 2017, when streaming accounted for nearly half of consumer spending on home entertainment. While U.S. consumers spent $9.55 billion on subscriptions to services such as Netflix (up 31 percent compared to 2016), DVD and Blu-ray sales dropped 14 percent to $4.72 billion, according to the Digital Entertainment Group's year-end report.
Looking at the home entertainment market as a whole, it is clear that the future of video distribution is digital. While consumer spending on streaming subscriptions and electronic sell-through increased in 2017, all physical formats, both sell-through and rental, suffered double-digit declines. Digital distribution models now account for two thirds of home entertainment spending and surpassed box office earnings for the first time last year.